NM Senate leader focuses on budget, not crime bills

SANTA FE — New Mexico lawmakers grappled Thursday with how to address a major shortfall in revenues during the final hours before a special legislative session convenes, with no clear political pact yet for rewriting the state budget.

Republican Gov. Susana Martinez called for the start of a special session Friday morning to resolve a stalemate with Democrats over how to fix the budget, and has added weighty criminal justice measures to the agenda — including a bill to reinstate the death penalty for convicted killers of police, children and corrections officers.

Lawmakers at the helm of the Democratic-controlled Senate have criticized Martinez for not providing a detailed budget proposal, and gave indications that anti-crime initiatives may take a back seat to addressing a gaping budget deficit.

"Right now our concern is solving this budget crisis that we're in," said Sen. Michael Sanchez, the Democratic majority floor leader from Belen. "We have another session coming up in three months (in January). All those other issues can be discussed during those periods of time."

New Mexico finished the budget year in June with a $131 million deficit after exhausting operating reserves, as a sustained downturn in energy markets cut into state revenues and rippled through the economy. At last count, the $6.2 billion general fund spending plan for the current year exceeds estimated revenues by $458 million.

A major debt ratings agency put New Mexico on notice in early September that it would review the state's finances for a possible downgrade, with an eye toward the anticipated special session. A downgrade would increase state borrowing costs.

Martinez has vowed to oppose any new taxes. Republican allies have indicated that caps or cuts to economic development incentives won't be considered. The governor also opposes interrupting an ongoing, gradual reduction of corporate income tax rates.

The state is scouring public accounts down to the school district level for idle cash, and appears likely to claw back unspent funds that had been earmarked for capital spending projects to replenish the general fund, but some state economists say that won't be enough.

Rep. Larry Larranaga, the Republican chairman of the House appropriations and finance committee, described the state's budget situation as "serious but not a crisis" and said he did not foresee major disruptions to government operations or any layoffs. Cuts to public educations were under discussion "on the administrative side, not cutting in the classroom."

Republicans, who hold a majority in the House of Representatives, have set a high priority on preserving funding for public safety, protective services for children and Medicaid health care, he said.

Sen. John Arthur Smith has insisted the state needs new sources of recurring annual revenues to satisfy credit agencies and avoid an even more severe budget shortfall next year.

He outlined a gut-wrenching dilemma as state lawmakers consider where to possibly cut agency spending at a committee meeting Thursday where Corrections Department officials reported a $17 million agency budget shortfall for the current year and a need for better pay to address a 22 percent staff vacancy rate.

"Some of us are strongly suspicious of being able to cut ourselves to prosperity, and you have a critical need in the prison system," Smith told Corrections Secretary Gregg Marcantel. "When we start cutting more (elsewhere) we're going to be taking out of the hides of public education and higher education, because that is 57 cents out of every dollar that we appropriate."

Smith vowed to block a proposal to reduce state spending through "retirement swaps" that would make employees pay a greater share of public pension contribution, while declining to say who put forward the idea.